RUT Rises, DJIA, SPX and Nasdaq Pullback While VIX Falls

DJIA - 99.80, -1.12% SP500 - 8.76, -0.96% NASDAQ Comp. - 10.58, -0.67% Russell 2000 + 3.74, +0.77% Exchange NYSE NASD Advancing 2,267 1,496 Declining 1,566 1,377 Oil $40.06 -$3.54 Gold $867.50 +$25.80 SOX 221.16 -0.35 VIX 49.84 -2.53 Strongest Sectors: XLY +0.55%...XLB +0.08%...XLI +0.04% Weakest Sectors: XLU -3.03%...XLK -1.94%...XLF -0.93% Sector Watch Up Trending: Sideways: XLE, XLP, XLU, XLY, XLV, XLI, XLB, XLK Down Trending: XLF The DJIA, SPX and Nasdaq pulled back on Wednesday while holding above the S1 level of Tuesday’s large white candle. The VIX did not confirm the down move in the SPX today as the VIX also moved lower to 49.84, just the second close below 50 in the past 10 weeks. This has bullish implications as it suggests fear did not rise as the SPX fell. The SOX was stronger that the Nasdaq today suggesting a lack of weakness in semiconductors. Also a review of the charts on the SPDR sector ETFS shows eight of the nine sectors have changed from down to neutral trend. We’ll continue to watch the sectors for a break above resistance to see if any of the trends move into an intermediate term uptrend. Oil fell another 3.54 to close at a new 52-week low 0f $40.06 as OPEC announced another 2.2 million bpd production cut effective Jan. 1. OPEC members have a reputation for exceeding production quotas, so some are skeptical about members honoring the cuts. Oil’s drop in price since July is being fueled by demand destruction from global recession factors. DECK one of Friday’s support bounce Stocks to Watch moved up another 3.49 or 5.2%. PCLN rose 4.32% on Wednesday. We placed an at support above the 20, 30 and 50 DMA entry on a real time virtual trade in our Dec. 10 webcast. We purchased 10 Jan 70 calls for 2.85. The close mark for Wednesday was $5.65, a 98% gain in just one week. Dave is teaching a two day Advanced Technical Analysis Workshop in Orlando. Index Commentary The DJIA formed a bearish harami that stayed above Tuesday’s S1 support level while closing for the second straight day above its 50 DMA. The SPX formed a bearish harami that found buyers just above Tuesday’s S1 level and again closed above its 50 DMA. The Nasdaq formed a white spinning top bearish harami that held above Tuesday’s S1 support level and fell just below its 50 DMA. The RUT moved higher forming a white spinning top and closed above its 50 DMA for the first time since Sep. 22. Stocks to Watch on Thursday Leading Stocks: Holding Above 30 DMA AYE…EZPW…PCLN…BAP…DLTR…FLR…FSTR…JCOM…JEC…PCR…ATK…B…IRIS…RTN…SNA…WMS…HAS…JOSB…AMZN…BIIB…BYI…HDB…LFC…PSSI…AMX…CERN…FWLT…GME…MTW…NEU…QSII…VMI…WAB…OI…PPD…CHU…FLS…MBT…RIO…BCO…MOS…NDAQ…ROST…SHW…VIVO…AET…ESRX…NGS…POT…UTX…AGN…ANSS…APH…CAM…CCC…CIR…CL…DECK…DV…EPR…ESI…GES…GILD…JW.A…KEX…MYGN…NIHD…NILE…NOV…PCP…SINA…SPN…SPTN…TEVA Moving Above 30 DMA = 6 ACL…BLUD…CBST…DNA…HLF…SOHU Moving Below 30 DMA = 3 AAPL…MBT…TECH Staying Below 30 DMA LAYN…OSIP…SWN…MMM…FLIR…PETS…STRA…BCR…AME…CHTT…GIS…PRGO…PTNR…TECH…AXYS…RCI…AFAM…MON…MTD…URBN… ICLR…CTSH…LNN...MCRS Wednesday’s Action Moving Up: FSLR, POT, GS, PCLN, STRA, SCHN, CLF, HANS, NUE, SOHU, PNRA, CNX, X, MOS, FWLT, ANR, IPI, COH, INFY, ONXX Moving Down: ESRX, NDAQ Intermediate Term Market Trend: Neutral – DJIA, SPX, Nasdaq, RUT Short Term Market Trend: Down